Grants by the Otto Bremer Trust to the Ordway Center for Performing Arts, Como Zoo, and the Blake School came under scrutiny in the first days of a trial that will determine whether leaders of the St. Paul-based charity can keep their jobs.

The Minnesota Attorney General's Office wants Ramsey County District Court Judge Robert Awsumb to replace the three trustees after they tried in 2019 to sell the trust's main asset, Bremer Financial Corp., which runs Bremer Bank, Minnesota's fourth-largest bank.

In a hearing that began Monday, state attorneys have so far focused on the charity's giving more than the trustees' conflict with executives and board members of Bremer Financial. The state called several current and former trust employees to discuss grants directed by the three trustees that didn't seem to fit the trust's criteria.

Carol Washington, the assistant state attorney general prosecuting the case, says the trustees "gradually shifted" the trust from serving the public interest to their own. In some cases, she said the trustees used a different process to approve grants where they often had personal connections such as serving on the boards of recipient organizations.

Attorney Mike Ciresi, who is representing the trustees, countered that all those grants fell within the trust's purposes.

One of the witnesses, Diane Benjamin, who worked at the trust for about six years, said she and her colleagues were surprised when they learned secondhand that it gave $1 million in 2014 to the Ordway, the performing arts center in downtown St. Paul.

"We also didn't fund the arts, so that also kind of stuck out," Benjamin said, adding that she often turned down or told other arts organizations not to bother to apply. "It's difficult when you tell people no, and there's this."

Similarly, she said she was confused when she came upon a grant, which she would have screened out, to the Como Zoo. Daniel Reardon, one of the three trustees, has served on the board of Friends of Como Zoo.

Charlotte Johnson, who has been a trustee for 30 years and the only trustee to testify so far, said that she knew that Reardon had been on that board, though she couldn't remember if he was on it at the time that he proposed the grant.

She also confirmed that she initially had reservations about the grant, wondering if it fit within the trust's mission, but she ultimately voted to approve it.

An attorney for the trustees pointed out that the Como Zoo is one of the only free zoos in the country and is frequented by underprivileged children.

As for the Ordway grant, the attorney general's office introduced a letter that Johnson wrote where she expressed her excitement about making the grant, but wanted to make sure the messaging around it made clear the trust was supporting the project because the Ordway is an important "community and regional asset and not create the sense that the Otto Bremer Foundation now funds the arts per se."

Otto Bremer, a German immigrant, founded the trust in the 1940s as a way to make sure that the profits of his banks went back towards the community. It's now one of the largest philanthropies in Minnesota, distributing about $50 million annually, and is the only one in the country that owns a bank.

The trust's guiding document, written by Bremer before his death in 1951, directs its funds to be used for relieving poverty, providing scholarships for college students, helping hospitals with facilities and equipment, and promoting citizenship.

Johnson said Thursday that document is the trust's "north star," though she added that it also gives trustees some discretion.

Benjamin said program officers also closely followed it and made sure grant proposals fit into one of those specific categories or else would screen them out. Staff members would then vet applications, make site visits on occasion, and provide recommendations to the trustees, who decided whether and how much to give.

But there was another kind of grants that the trustees referred to as "strategic initiatives" that were not vetted by staff members that way. These grants tended to be larger in size.

Johnson said that the strategic grants could be a "more complex" request and were a way for trustees to help "take the load off" staff. But she said all such grantees still had to make a full application and go through the proper due diligence.

Benjamin, the former senior program officer, called the strategic grants "awkward." In some cases, she would find out about them when she was out at a site visit and an organization would thank her for the large grant they had received that she had not been aware of.

Eyebrows were also raised about grants given to the Blake School, which was attended by the children of trustee Brian Lipschultz and where he served on the board. Benjamin said the trust generally didn't provide grants to schools.

One of the trustees' attorneys pointed out that grant was for LearningWorks, a program for low-income, high-achieving students in Minneapolis.

During her testimony, Johnson also acknowledged that she had recommended a $500,000 strategic grant to the Friends of St. Paul College Foundation, where her husband had served on the board, though she said she didn't remember if he was still on the board at the time of the grant.